Incorporating a new business

Posted by Cristina

 

Hi,
I'm thinking of starting my own business. What is the difference between S Corp, C Corp, LLC, and partnerships.
Thank you!

‹ Creating an LLC in Florida

Hi Cristina

Submitted by Melissa913 on April 29, 2009 - 10:34am.

Hi Cristina,

There are four ways to classify your new company:

1- Sole Proprietorship
-Does not require formation costs
-Owner has full control
-No double taxation
-Unlimited personal liability

2- C Corp
-Must file with the state. Specific filing fee required.
-Shareholders elect directors who manage the business
-Possibility of double taxation --  the company is taxed at the corporate level and then at the individual shareholder level.
-Shareholders are not typically held liable

3- S Corp
-Must file with the state. Specific filing fee required.
-Shareholders elect directors who manage the business
-No double taxation: income is passed through to the shareholders and therefore there is no tax at the entity level
-Shareholders are not typically held liable

4- Limited Liability company (LLC)
-Must file with the state. Specific filing fee required.
-Members can set up the structure however they choose (shareholder elections are not necessary).
-No double taxation: income is passed through to the shareholders and therefore there is no tax at the entity level
-Memebers are typically not held liable.

Hope this helps!
Melissa

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